Part Period Balancing

Use

The part period balancing procedure adheres to the "classic" lot size formula for the minimum costs whereby variable costs (storage costs) are equal to the lot size independent costs.

Prerequisites

In the material master (
MRP 1
view) for the material, you have set the indicator for
SP
for
Part period balancing
in the
Lot size
field and the
Lot size independent costs
and
storage costs indicator
.

Features

Starting from the shortage date, successive requirements are grouped together to form lots until the
sum of the storage costs equals lot size independent costs.
(In other words, this procedure involves an adjustment between costs independent of quantity and costs dependent of quantities and time.)

Example

Price:

$ 20

Lot size independent costs:

$ 100

Storage cost percentage:

10 %

The most appropriate lot size is 2000 pieces because if further requirements were added to this lot, total storage costs would be larger than the lot size independent costs.